When hiring a professional in-home caregiver, there are
a couple of ways in which they can be selected, either
from an agency which specializes in screening and
placing professional caregivers, or by doing the
research, interviewing, screening, and hiring all on
your own. Keep in mind that if you hire a professional
caregiver on your own, you will be entirely responsible
for paying certain types of taxes that may be new to
you, as well as having to know which taxes your new
employee should be paying as well. Although you’ve hired
a professional caregiver, who is much more than just a
“domestic housekeeper”, the IRS will recognize you as
the employer of a domestic.

If you pay your professional caregiver more than $1400
in cash wages per calendar year (note: the IRS may
change this amount annually), you will be expected to
file payroll taxes on such things as: Social Security &
Medicare taxes (7.65% of gross wages); Federal
Unemployment Tax (FUTA) (0.8% of gross wages or less in
most circumstances); state unemployment and disability
insurance taxes levied on the employer; and advance
payment of the earned income credit for eligible
employees. In order to pay an employee’s payroll taxes,
you, the employer, will be required to collect the
employee’s social security and Medicare taxes. If you
fail to do so, you may be solely responsible for sending
in your employee’s taxes on their behalf. Do know that
deducting federal income taxes and most state income
taxes is optional. If income taxes are not withheld by
the employer, then the employee is required to make
periodic payments of any amounts due. Just as you must
pay taxes as an employer, you should know the type of
taxes your employee will need to pay for themselves
and/or contribute towards: Social Security & Medicare
Taxes (7.65% of gross wages collected and remitted by
employer); Employee Disability/Unemployment Taxes where
required; Federal/State Income Tax.

As an employer of a professional caregiver (domestic),
you must make annual payments for Social Security,
Medicare and Withheld Income Tax (if applicable).
Remember that wage reporting must occur on a quarterly
basis, and state unemployment taxes and withheld state
income taxes must be paid on a quarterly basis. Federal
Unemployment is due annually, and, as an employer, you
are required by law to give your employee a wage and tax
statement (Form W-2) no later than January 31.